The Monetary Authority of Maldives (MMA) has issued a Foreign Exchange Regulation mandating tourist establishments to exchange US Dollars from a local bank at a dedicated rate for each tourist they serve.

The Monetary Regulation in force since 1 March 1987 will be repealed following the regulation coming into effect starting today.

The regulation, which was passed and gazetted by the board of MMA today, requires a certain amount of foreign currency income to be exchanged within a certain amount locally. As such, two categories have been identified.

Category A includes resorts, integrated resorts, resort hotels, hotels, tourist vehicles and other such places that are subject to green tax under the Tourism Act. Category A tourism service providers shall exchange the total tourist arrivals during the month at the rate of $500 per tourist during the month through a bank before the 28th day of the third month following the month

Category B includes guesthouses and hotels in residential areas with 50 rooms or less. Category B tourism service providers will have to exchange foreign currency in the same way; However, it is at a rate of $25 per tourist

In addition, tourism service providers are required to deposit foreign exchange earned during a month along with realised sales proceeds into a foreign exchange account opened in a bank before the 28th day of the third month following the month.

The deposit must be made in dollars or other foreign currency permitted by the MMA.

A business who fails to exchange foreign currency as per the rules will be fined between MVR 5,000 and MVR 1 million.

According to the rules, in certain circumstances, permission may be sought from the authority. Those situations include:

- Payment of taxes in foreign currency

- Payment of foreign currency debt to a financial institution

- Foreign currency obligations imposed by a court judgment

- Other foreign exchange arrangements permitted by the Authority